What is BrandywineGLOBAL - Globalome Opportunities Fund Predictability Rank?
Not Rated
Warren Buffett said many times that the companies he likes are:
1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.
It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.
GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.
BrandywineGLOBAL - Globalome Opportunities Fund Predictability Rank Calculation
In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.
Our study may be subject to these biases and assumptions:
Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.
The correlation between business predictability and investment returns of a company is showed below.
Correlation Between Business Predictability and Investment Returns
| Predictables | Non-Predictable | All stocks |
|---|
| Total Number of stocks | 570 | 1833 | 2403 |
| Total Lost Money | 61 | 830 | 891 |
| Total Lost More Than 50% | 18 | 412 | 430 |
| Total Lost More Than 90% | 4 | 86 | 90 |
| Average Gain | 260.6% | 100.0% | 138.1% |
| Median Gain | 150.0% | 13.0% | 39.0% |
| Maximum Gain | 2852.0% | 11483.0% | 11483.0% |
| Maximum Loss | -100.0% | -100.0% | -100.0% |
| Annualized Average Gain | 12.7% | 6.7% | 8.4% |
| Annualized Median Gain | 8.9% | 1.1% | 3.1% |
For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.
| Predictability Rank | 5-Star | 4.5-Star | 4-Star | 3.5-Star | 3-Star | 2.5-Star | 2-Star | 1-Star (non-predictable) | Average among all |
|---|
| % Out of All 2403 Stocks |
3.3% |
2.9% |
3.7% |
3.3% |
3.3% |
3.7% |
3.3% |
76.3% |
100% |
| % that are in Loss (10y) |
3% |
10% |
8% |
9% |
11% |
18% |
16% |
45% |
37% |
| Average Gain (10y) |
364.6% |
330.9% |
278.0% |
235.1% |
243.5% |
227.8% |
154.8% |
100.0% |
138.1% |
| Median Gain (10y) |
238.5% |
193.5% |
171.0% |
159.0% |
132.5% |
113.5% |
87.0% |
13.0% |
39.0% |
| Maximum Gainer |
2228.0% |
2547.0% |
2452.0% |
2852.0% |
2432.0% |
1892.0% |
1807.0% |
11483.0% |
11483.0% |
| Maximum Loser |
-82.0% |
-53.0% |
-67.0% |
-100.0% |
-83.0% |
-100.0% |
-78.0% |
-100.0% |
-100.0% |
| Annualized Average Gain |
15.4% |
14.6% |
13.2% |
12.0% |
12.2% |
11.7% |
9.1% |
6.7% |
8.4% |
| Annualized Median Gain |
12.1% |
10.6% |
9.8% |
9.3% |
8.2% |
7.3% |
6.0% |
1.1% |
3.1% |
For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank
Also read:
Part II: What worked in the market from 1998-2008? Part II: Role of Valuations
Part III: Intrinsic Value, Discounted Cash Flow and Margin of Safety
BrandywineGLOBAL - Globalome Opportunities Fund (BrandywineGLOBAL - Globalome Opportunities Fund) Business Description
Traded in Other Exchanges
N/A
Address
620 Eighth Avenue, 47th Floor, New York, NY, USA, 10018
BrandywineGLOBAL - Global Income Opportunities Fund Inc is a non-diversified, closed-end management investment company. The primary investment objective is to provide current income. The secondary investment objective is capital appreciation. The Fund seeks to achieve its investment objectives by investing, under normal market conditions, at least 80% of its assets in global fixed-income securities.
Executives
| Oliveira Marc De |
officer: Secretary/Chief Legal Officer |
C/O LEGG MASON & CO. LLC, ONE FIRST STAMFORD PLACE, STAMFORD CT 06902 |
| Daniel P Cronin |
director |
235 EAST 42ND ST, NEW YORK NY 10017 |
| Laura F Fergerson |
other: Manager/Investment Manager |
3310 QUALITY DRIVE, 2ND FLOOR, RANCHO CORDOVA CA 95670 |
| Brian Eakes |
other: Manager/Investment Manager |
100 INTERNATIONAL DRIVE, BALTIMORE MD 21202 |
| Jed A. Plafker |
other: Director of Sub-Adviser |
ONE FRANKLIN PARKWAY, SAN MATEO CA 94403 |
| Matthew Nicholls |
other: Director of Sub-Adviser |
ONE FRANKLIN PARKWAY, SAN MATEO CA 94403 |
| George P. Hoyt |
officer: Secretary and Ch Lgl Officer |
C/O FRANKLIN TEMPLETON, 100 FIRST STAMFORD PLACE, STAMFORD CT 06902 |
| Fred Steven Jensen |
officer: Chief Compliance Officer |
LEGG MASON, 620 EIGHTH AVENUE, 49TH FLOOR, NEW YORK NY 10018 |
| Gregg Gorman |
other: Director of Sub-Adviser |
100 INTERNATIONAL DRIVE, 8TH FLOOR, BALTIMORE MD 21202 |
| Minnesota Life Insurance Co /bd |
10 percent owner |
400 N ROBERT ST, ST PAUL MN 55101 |
| Thrivent Financial For Lutherans |
10 percent owner |
901 MARQUETTE AVENUE, SUITE 2500, MINNEAPOLIS MN 55402-3211 |
| Phillip J. Gass |
other: SEE FOOTNOTE (4) |
C/O NASSAU ASSET MANAGEMENT LLC, 1 AMERICAN ROW, HARTFORD CT 06102 |
| Nassau Asset Management Llc |
10 percent owner, other: SEE FOOTNOTE (3) |
1 AMERICAN ROW, HARTFORD CT 06102 |
| Christopher Berarducci |
officer: Treas/Principal Finan Officer |
LEGG MASON, 620 EIGHTH AVENUE, NEW YORK NY 10018 |
| Nisha Kumar |
director |
1735 MARKET STREET, 32ND FLOOR, PHILADELPHIA PA 19103 |
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